ID :
173861
Thu, 04/07/2011 - 14:36
Auther :
Shortlink :
http://m.oananews.org//node/173861
The shortlink copeid
One in five struggle to repay debt in Australia
More than one in five Australians are struggling to repay debt because of increased living costs, a survey shows.
Some 21 per cent of those survey in Veda Advantage's bi-annual Australian Debt Study had difficulty with their repayments, up from 19 per cent six months earlier.
"Almost three in every ten Australians who are looking to take on more debt are already in a position of financial hardship and this is concerning," Veda head of external relations Chris Gration said.
"The introduction of positive credit reporting is vital to help those living on the financial fringe avoid a situation where they cannot repay their debts."
Positive reporting records additional information including whether a person has been struggling to make minimum credit repayments," Veda said.
The report also said bigger than expected bills had for the first time exceeded other general life expenses.
It is now the second largest reason why Australians owe more money.
Of the 21 per cent of people struggling to pay back loans, two per cent said they were unsure how they would make their next debt repayment.
Of those who were already struggling with debt, 28 per cent were likely to apply for more credit in the next six months, Veda said.
The report also found 14 per cent of the three quarters of Australians with credit facilities owed more now than they did 12 months ago.
The cost of living had increased markedly since September last year and people were now worried about transport and petrol costs which rose 10 per cent over the period, the report found.
But among those with a credit card, there was an intention by more than 60 per cent to reduce the debt on the card over the next six months.
More than a third of Australians intend to apply for credit to purchase a property and just over 10 per cent will put their holidays on the plastic, while 15 per cent will use their cards for a one-off large purchase.
Mr Gration said responsible lending laws, which came into effect at the start of the year, had improved consumer protection but the system remained flawed.
"Lenders don't have access to all the information required to allow financial institutions to make a complete and accurate assessment of a person's capacity to repay a loan," he said.
Credit reporting had been under review since January 2006.
In 2009, the federal government announced its support of positive reporting and, in 2010, the minister responsible for privacy, Brendan O'Connor outlined a timeline passage for legislation intended by mid-2012.
The study found that 57 per cent of people were managing their debts, although 47 per cent had cut back on groceries to repay debt, up from 43 per cent six months before.
The Australian Debt Study Report is conducted in March and September over the phone by Galaxy Research Omnibus. This is the eighth report, and it interviewed 1,036 people.
Some 21 per cent of those survey in Veda Advantage's bi-annual Australian Debt Study had difficulty with their repayments, up from 19 per cent six months earlier.
"Almost three in every ten Australians who are looking to take on more debt are already in a position of financial hardship and this is concerning," Veda head of external relations Chris Gration said.
"The introduction of positive credit reporting is vital to help those living on the financial fringe avoid a situation where they cannot repay their debts."
Positive reporting records additional information including whether a person has been struggling to make minimum credit repayments," Veda said.
The report also said bigger than expected bills had for the first time exceeded other general life expenses.
It is now the second largest reason why Australians owe more money.
Of the 21 per cent of people struggling to pay back loans, two per cent said they were unsure how they would make their next debt repayment.
Of those who were already struggling with debt, 28 per cent were likely to apply for more credit in the next six months, Veda said.
The report also found 14 per cent of the three quarters of Australians with credit facilities owed more now than they did 12 months ago.
The cost of living had increased markedly since September last year and people were now worried about transport and petrol costs which rose 10 per cent over the period, the report found.
But among those with a credit card, there was an intention by more than 60 per cent to reduce the debt on the card over the next six months.
More than a third of Australians intend to apply for credit to purchase a property and just over 10 per cent will put their holidays on the plastic, while 15 per cent will use their cards for a one-off large purchase.
Mr Gration said responsible lending laws, which came into effect at the start of the year, had improved consumer protection but the system remained flawed.
"Lenders don't have access to all the information required to allow financial institutions to make a complete and accurate assessment of a person's capacity to repay a loan," he said.
Credit reporting had been under review since January 2006.
In 2009, the federal government announced its support of positive reporting and, in 2010, the minister responsible for privacy, Brendan O'Connor outlined a timeline passage for legislation intended by mid-2012.
The study found that 57 per cent of people were managing their debts, although 47 per cent had cut back on groceries to repay debt, up from 43 per cent six months before.
The Australian Debt Study Report is conducted in March and September over the phone by Galaxy Research Omnibus. This is the eighth report, and it interviewed 1,036 people.
